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2024 (9) TMI 1079 - AT - Service TaxViolation of condition that Cenvat credit and benefit of Notification No.12/2003-ST had not been availed when the appellant have produced a general declaration from transport agency to this effect - availing the abatement of 75% from the gross amount in respect of goods transport service under N/N. 32/2004- ST - reverse charge mechanism - HELD THAT - N/N. 32/2004-S.T. prescribes the condition that the transport agencies should not avail the benefit of Cenvat credit and the benefit of N/N. 12/2003-S.T in order to extend the benefit of N/N.32/2004-S.T. to the service recipient who is liable to pay the service tax on reverse charge mechanism. The adjudicating authority did not accept the declaration only on the ground that such declaration should be made on the body of the consignment note. The contention of the adjudicating authority as well as the Commissioner (Appeals) that the declaration is only to convey the fact that the transport agency is not availing the Cenvat credit as well as the benefit of N/N. 12/2003-S.T. dated 20.06.2003, is completely disagreed - It does not make any difference whether the declaration is given by the transport agency is general or it is given on the consignment note. Moreover, the department could not bring any evidence that such declarations are false or the transport agencies have availed the Cenvat credit and N/N. 12/2003-S.T. In such position the denial of the abatement of 75% to the appellant under N/N. 32/2004-S.T. is only on assumption and presumption. On the face of it the declaration given by the transport agencies evident the fact that the transport agencies have not taken the benefit of both provisions. Therefore, there are no reason why on the basis of general declaration by transport agency benefit of 75% abatement as provided under N/N. 32/2004-S.T. can be denied. This issue has been considered by the Hon ble High Court of Gujarat in the case of COMMR. OF SERVICE TAX, AHMEDABAD VERSUS CADILA PHARMACEUTICALS LTD. 2013 (1) TMI 353 - GUJARAT HIGH COURT where it was held that ' Notification requiring the receiver of the service to pay the tax also does not stipulate any such condition. Therefore, the requirements prescribed by the Board as per circular cannot be mandatory and cannot be used for denying substantive rights.' Thus, the appellant has correctly availed the abatement of 75% under Notification No.32/2004-S.T. - the impugned order is not sustainable - appeal allowed.
Issues Involved:
1. Whether the appellant violated the condition of Notification No. 32/2004-ST by availing abatement of 75% from the gross amount for goods transport service without availing Cenvat credit or the benefit of Notification No. 12/2003-ST, based on a general declaration from the transport agency. Detailed Analysis: Issue 1: Violation of Notification No. 32/2004-ST Conditions Appellant's Argument: The appellant argued that general declarations from transport agencies stating they had not availed Cenvat credit or the benefit of Notification No. 12/2003-ST were sufficient for compliance. The appellant cited various judgments supporting their position: - Commr. of Service Tax, Ahmedabad Vs. Cadila Pharmaceuticals Ltd (2012) - Lykes Line Ltd Vs. Comm. Service Tax, Mumbai - I (2017) - Commr. C., Ex., Patna Vs. Hindustan Co-Cola Beverages Pvt Ltd (2018) - Karuna Agencies Vs. Commr CGST & Central Ex, New Delhi (2023) - Eastern Coalfields Ltd Vs Commr. C.Ex., & S.T. Bolpur (2013) - Indian Oil Corporation Ltd Vs. Commr. C. Ex., Patna (2013) - Circular No. B1/6/2015-TRU Dated 27/07/2005 Respondent's Argument: The respondent reiterated the findings of the impugned order, which rejected the general declarations on the ground that they should be made on the consignment note. Tribunal's Findings: The tribunal found that Notification No. 32/2004-ST requires the transport agencies not to avail Cenvat credit or the benefit of Notification No. 12/2003-ST. The tribunal disagreed with the adjudicating authority's view that the declaration must be on the consignment note. It held that a general declaration is sufficient and that the department failed to provide evidence that the declarations were false or that the transport agencies availed Cenvat credit and Notification No. 12/2003-ST benefits. The tribunal concluded that denial of the 75% abatement based on assumptions and presumptions was unjustified. Supporting Judgments: 1. Commr. of Service Tax, Ahmedabad Vs. Cadila Pharmaceuticals Ltd (2012): - The Gujarat High Court held that the requirements prescribed by the Board's Circular were not mandatory for denying substantive rights. The tribunal's view that general declarations were sufficient was upheld. 2. Lykes Line Ltd (2017): - The tribunal reiterated that the conditions imposed by the Board Circular for obtaining declarations on consignment notes were not mandatory. The substantive benefit of the exemption could not be denied unless the department proved a violation of the notification conditions. Conclusion: The tribunal concluded that the appellant correctly availed the abatement of 75% under Notification No. 32/2004-ST based on general declarations from the transport agencies. The impugned order was set aside, and the appeal was allowed. Final Judgment: The appeal was allowed, and the impugned order was set aside, affirming that the appellant correctly availed the 75% abatement under Notification No. 32/2004-ST based on general declarations from the transport agencies. The tribunal emphasized that the denial of the abatement was based on incorrect assumptions and that the general declarations were sufficient for compliance.
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